UPDATE 1-Brazil govt holds coffee crop forecast at 50.5 mln bags

Thu Sep 6, 2012 10:57am EDT

* Coffee harvest nearly finished; next crop flowers late
Sept
    * Conab sees record output; exporters say 2010 was bigger
    * Wet weather problematic early in harvest, drier since

 (Adds quote, details, byline)
    By Peter Murphy
    BRASILIA, Sept 6 (Reuters) - Brazil's 2012/13 coffee crop
will turn out a record 50.5 million 60-kg bags, government crop
supply agency Conab said on Thursday, holding to the forecast it
gave in May.
    The world's top coffee grower is near the end of a
higher-output harvest in a two-year cycle that sees output rise,
then fall from one year to the next, pushing up this year's
output by about 16 percent over last year's, Conab said.
    The harvest was blighted by too little and, at times, too
much rainfall during its development phase, and showers during
the first weeks of the harvest tainted many beans that were
knocked to the ground by the precipitation.
    "We can estimate that about 80 percent of the (production)
has now been harvested, with only the task of gathering beans
from the ground remaining," Conab said in its report. 
    The weather later turned drier and has enabled producers to
speed up the harvest. Local weather forecaster Somar said
weather conditions look good to launch the coffee flowering
period in late September. 
   
    Conab highlighted the very good general condition of trees,
boding well for next year's smaller off-year crop. It said trees
had plentiful leaf coverage and appeared well nourished and
without signs of pest infestation or disease.
    Exporters' views have conflicted with Conab's this year,
with most estimating a smaller harvest than in 2010. Last year
Conab said it had changed the forecasting methodology it uses to
bring its numbers closer to the usually higher figures of the
private sector. The change may explain the diverging views.
    Production of smoother, more expensive arabica beans will
account for three-quarters of total 2012/13 output at 37.9
million bags, while cheaper, more astringent robusta will reach
12.5 million bags, Conab said in its third estimate for the
crop.
    December coffee futures on the New York exchange were
trading 1.4 percent lower at $1.5815 per pound on Thursday.

 (Reporting by Peter Murphy; editing by John Wallace)
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